keep waiting they wont be reduced anytime soon-no hurry to sell - the price goes up with inflation
It may have been true (many times), that Real Estate values has proved to be a good hedge against inflation, but only as long it's (RE) raise in value was not one of the main reason for that very inflation (which is the case in more than one of the countries buyers to our market has come from in the last years). But inflation is not really the issue on hand HERE at the moment... besides the fact that, as far real estate is concerned, this is a Dollar based economy... at least around the touristy regions.
Prices here, will (have to) come down, and I hate to predict, it looks like big time. Owners are already calling their agents to drop prices. Not much yet, but it will come.
How would the DR be the only country to keep on making money in this world wide crisis, which has not just started yet, it has been going on for 3 or more years?
Just look at Spain for some historical data. SAME scenario just not as though; the buyer's countries' economies went up side down (mainly Germany and England)... the buyers stopped coming the ones who already owned developed a sudden urge to leave (Sell!) too.
Price drops over the last 3 to 4 years? up to 80%.
This region, just as Spain did, depends on people from abroad being able to dump money here. That is pretty much over now. The old rule of offer versus demand can play two ways.
- Oh yes! Spain had a lot of overpriced properties (naw... we wouldn't have that here, now would we?).
- But then, it must have been the over existence of new spec properties being increased senselessly! I'll hand you that, true too! (erm... just look around here!).
- Spain, well Spain... bad quality-price ratio... when compared to the buyers home countries! HA! You don't say! That could not ever happen to dawn on some people looking around here, especially now that money will be tight... I mean, hey, aren't we talking about Puerto Chiquito? Name me one development in other DEVELOPED world locations (where buyers used to come from) with these issues.
- Ever checked the current and still decreasing values in places like Southern Florida? Let me give you an example: We built single family homes in West Palm Beach and Broward County. Last one we sold (new, in a nice neighborhood, electricity, real streets with sidewalks, parks, green zones, phone, water every day all day long... nights too and so forth)... was in early 2001 just before the bubbling began... USD 150K! 3 years later the same home SOLD for 375K! Now, I know my homes and I'm mighty proud of them, but there was NO way this house could be worth that much money unless salaries had doubled or trippled! Well guess what, the US is suffering from inflation... it's currency weak, elevated cost of life... everything. These homes are now being offered for 180K and the still DON'T sell.
- Don't you think that if people who mortgaged equity out of their bubbled up real estate a couple of years ago, to fulfill their little "buy a second home in the Caribbean" dream, and now struggle to hold on to their HOME back home, will a) want to sell their dream turned night mare in the Caribbean and/or b) not be able to buy here? Who has been buying most Real Estate around here in the past years? The so affluent Dominican middle class or... Americans, Canadians, Brits... and so forth? Erm... are you watching the news... I mean not just these past 30 days... but the past 3 years... about what's cooking in these countries?
And there's more... I could go on and on.
How do you think this will NOT affect this country's real estate market... especially around here (the coasts)?
Will Obama or McCain resolve that issue for us. Well, I hate to say that certainly in the short term (6 to 18 months), NOPE. Will they in the long term? I think that one big lesson that will emerge out of this whole mess, especially in the States and some EU countries too, is that the idea of making money so easy to spend... especially money people don't really have, just to make the economy boom on excess spending was a BAD idea, because it just so turns out to be the very root of the whole mess we are facing.
I don't think either candidates will let that happen again... and besides... it's a world crisis and neither of them will be world president just yet.
So again:
keep waiting they wont be reduced anytime soon-no hurry to sell - the price goes up with inflation
Pardon me Sir, but that dawg sure ain't huntin'.
... J-D.
